BCEAO Instruction 007-09-2017 on Financial Institutions' Application of the UEMOA Anti-Money Laundering and Counter-Terrorist Financing Law

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The Governor of the Central Bank of West African States (BCEAO), Having regard to the Treaty of the West African Monetary Union (UEMOA) dated January 20, 2007, particularly Article 34; Having regard to the Statutes of the Central Bank of West African States (BCEAO), annexed to the UEMOA Treaty dated January 20, 2007, particularly Articles 30 and 59; Having regard to the Convention governing the Banking Commission of the West African Monetary Union; Having regard to Regulation No. 15/2002/CM/UEMOA dated September 19, 2002 on payment systems in the member states of the West African Economic and Monetary Union (UEMOA); Having regard to Regulation No. 09/2010/CM/UEMOA dated October 1, 2010 on external financial relations of the member states of the West African Economic and Monetary Union; Having regard to the Uniform Act on combating money laundering and terrorist financing in UEMOA member states, particularly Articles 1, 11, 18 to 38, 40, 46 to 57, 64, 79, 81, 82, 89 to 91, 100, 104, 124, 125 and 163; Having regard to the Uniform Act on banking regulation; Having regard to the Uniform Act on decentralized financial systems regulation; Having regard to Instruction No. 08-05-2015 dated May 21, 2015 governing the conditions and procedures for the exercise of activities by electronic money issuers in UEMOA member states,

Avenue Abdoulaye FADIGA
BP 3108 – Dakar - Sénégal
Tel. : (221) 33 839 05 00 / Fax : (221) 33 823 93 35 courrier.bceao@bceao.int - www.bceao.int

INSTRUCTION NO. 007-09-2017 ON THE APPLICATION PROCEDURES BY FINANCIAL INSTITUTIONS OF THE UNIFORM ACT ON COMBATING MONEY LAUNDERING AND TERRORIST FINANCING IN UEMOA MEMBER STATES

DECISION

PRELIMINARY TITLE: GENERAL PROVISIONS
Article 1: Definitions
For the purposes of this Instruction, the following terms are defined as:
– Manual exchange dealer: any natural or legal person established in the territory of a UEMOA member state and having received approval from the Minister responsible for Finance to carry out manual exchange operations; – CENTIF: the National Financial Intelligence Unit; – Financial company: a company established in UEMOA whose main activity, in one or more member states of UEMOA, is to take and manage financial participations and which, either directly or through companies with the same object, controls one or more companies carrying out financial operations, at least one of which is a credit institution; – Electronic money distributor: SFDs, any legal or natural person registered in the Trade and Movable Credit Register or any other legally established register, offering customers, pursuant to a contract with the issuing institution, an electronic money distribution service; – Electronic money distribution: cash withdrawal services, loading and reloading of electronic money against the handover of fiat or book money, payment and money transfer services linked to electronic money; – Credit institutions: banks and financial establishments with a banking character, within the meaning of the law on banking regulation; – Electronic money institution: any legal person, other than banks, payment financial establishments and decentralized financial systems, authorized to issue means of payment in the form of electronic money and whose activities are limited to the issuance and distribution of electronic money; – FATF: the Financial Action Task Force; – Approved intermediary: any credit institution established in the territory of a UEMOA member state and having received the status of approved intermediary, by approval from the Minister responsible for Finance; – Banking operations intermediary (IOB): any natural or legal person other than a credit institution, which, as a regular main or ancillary activity, brings parties together with a view to the conclusion of a banking operation, without acting as surety or guarantor for the performance of one party's obligations. The activity of banking operations intermediary may only be exercised between two persons, at least one of which is a credit institution; – Sub-agent for rapid money transfers: any natural or legal person exercising the activity of rapid money transfer under the responsibility of an approved intermediary or a decentralized financial system; – Sub-delegate in foreign exchange repatriation operations for customers: the establishment that carries out foreign exchange repatriation operations for customers under the responsibility of an approved intermediary; – Sub-distributor of electronic money: any legal or natural person or decentralized financial system offering customers, pursuant to a contract with the distributor and under the responsibility of the issuer, an electronic money distribution service; – Decentralized financial system (SFD): the institution whose main object is to offer
financial services to persons who generally do not have access to credit institution operations and authorized under the law on decentralized financial systems regulation to provide these services; – UEMOA: the West African Economic and Monetary Union; – UMOA: the West African Monetary Union.

Article 2: Object
This Instruction aims to specify the application procedures, by the financial institutions referred to in Article 3 below, of the uniform act on combating money laundering and terrorist financing in UEMOA member states.

Article 3: Scope of application
This Instruction applies to the following financial institutions:
– credit institutions;
– financial companies;
– Decentralized Financial Systems (SFDs);
– manual exchange dealers;
– electronic money institutions.
The provisions to be implemented by the financial institutions referred to in the first paragraph above relate to all operations carried out under their responsibility. They also include, where applicable, those performed by sub-agents for rapid money transfers, banking operations intermediaries, sub-delegates in foreign exchange repatriation operations for customers, as well as distributors and sub-distributors of electronic money. However, the provisions of Article 6 first paragraph, Article 7 and Article 12 of this Instruction do not apply to manual exchange dealers.

TITLE I: INTERNAL ORGANIZATION IN MATTER OF COMBATING MONEY LAUNDERING AND TERRORIST FINANCING
Article 4: Internal programs for the prevention of money laundering and terrorist financing
The financial institutions subject to this Instruction develop and implement internal programs for the prevention of money laundering and terrorist financing, in accordance with Article 24 of the uniform act on combating money laundering and terrorist financing in UEMOA member states. Before their implementation, the internal programs referred to in the first paragraph above are documented and validated by the Board of Directors or equivalent deliberating body of the financial institution. The General Management or executive body of the financial institution ensures their implementation in accordance with Article 10 below. The internal programs are subject to a periodic review of their effectiveness by the internal audit body, at least once a year, in accordance with Article 10 below, to take into account the evolution of the financial institution's activity as well as the legal and regulatory environment.

Article 5: Internal procedures for the prevention of money laundering and terrorist financing
The financial institutions subject to this Instruction establish internal procedures to ensure compliance with legal and regulatory provisions regarding the prevention of money laundering and terrorist financing in UEMOA. The procedures referred to in the first paragraph prescribe the due diligence to be performed and the rules to be respected regarding:

1. identification and customer knowledge;
2. establishment and updating of customer files;
3. setting deadlines for verifying client identities and updating related information;
4. identification and monitoring of operations concerning politically exposed persons at risk of money laundering and terrorist financing;
5. development of a map and assessment of the money laundering and terrorist financing risks to which the financial institution is exposed;
6. establishment of relationships with cross-border banking correspondents, notably based on the template model for collecting information attached to this Instruction, prior to entering into a business relationship. The duly completed document must be validated by the General Management or equivalent body of the solicited structure;
7. monitoring and examination of unusual operations and transactions;
8. detection and analysis of operations likely to be subject to a suspicious transaction report (STR) to the CENTIF;
9. implementation of freezing measures on funds and other financial resources taken by competent authorities;
10. retention of all documents relating to client identities;
11. establishment and maintenance of databases related to client operations, collected within the framework of due diligence obligations;
12. prior approval of all new products, services or IT applications regarding money laundering and terrorist financing risks;
13. monitoring of operations executed via the Internet and other electronic media;
14. formalization of the monitoring of operations performed by staff on behalf of third parties;
15. monitoring of operations with countries and territories declared non-cooperative by the FATF and persons subject to asset freezing measures;
16. processing of information requests received from the CENTIF as well as investigation and prosecution authorities;
17. implementation of all other obligations borne by the financial institution.
    The internal procedures referred to in the first paragraph must be approved by the Board of Directors or equivalent body of the financial institution.

Article 6: Information system
Financial institutions establish an information system enabling:

1. profiling of clients and accounts opened in their books;
2. real-time filtering of clients and transactions;
3. monitoring of account movements and generation of alerts;
4. determination of the global balance of all accounts held by the same client;
5. recording of operations performed by the same client, whether occasional or regular;
6. identification of transactions with a suspicious or unusual character.
   The financial institutions take into account any information likely to modify the client's profile, within the deadlines provided for in point 3 of Article 5 above. In any case, these modifications must be integrated into the information system within a maximum period of one month. Manual exchange dealers establish an information system enabling the identification of transactions with a suspicious character and the recording of operations performed by the same client, whether occasional or regular. The information system must be subject to a periodic review of its effectiveness, at least once a year, in accordance with Article 10 below, to adapt it according to the nature and evolution of the financial institution's activity as well as the legal and regulatory environment.

Article 7: Internal structure for combating money laundering and terrorist financing
The financial institutions subject to this Instruction set up a specific structure for combating money laundering and terrorist financing. This structure must be adapted to the organization, nature, and volume of the financial institution's activities. The risk management structure or the compliance function responsible may take on the responsibilities regarding combating money laundering and terrorist financing when the size of the establishment does not justify that this function be entrusted to a separate structure. It is responsible for implementing a monitoring and control system for the proper functioning of procedures established in accordance with current regulations regarding combating money laundering and terrorist financing. The executive body equips the head of the internal structure for combating money laundering and terrorist financing with adequate human and material resources and ensures operational independence for the execution of their mission. The head of the internal structure for combating money laundering and terrorist financing reports to General Management. The specific structure for combating money laundering and terrorist financing is responsible for:

1. centralizing clusters of suspicion indicators identified by staff;
2. internally processing suspicious transaction report files;
3. drafting suspicious transaction reports and transmitting them to the CENTIF;
4. responding to regular or ad hoc requests from control authorities, the CENTIF, or partner institutions;
5. participating in organizing training and awareness actions for staff regarding combating money laundering and terrorist financing;
6. handling all other due diligence within the framework of the internal prevention mechanism for combating money laundering and terrorist financing.
   The specific structure for combating money laundering and terrorist financing must not be involved in the execution of operational tasks.

Article 8: Communication of the identity of CENTIF correspondents
Credit institutions and financial companies communicate to the CENTIF, BCEAO, and UEMOA Banking Commission, within a period of two months from the date of entry into force of this Instruction, the identity of their executives or authorized officers responsible for making suspicious transaction reports to the CENTIF. SFDs, manual exchange dealers, and electronic money institutions transmit to the CENTIF and their respective control authorities, within a period of two months from the date of entry into force of this Instruction, the identity of their executives or authorized officers responsible for making suspicious transaction reports to the CENTIF. In application of the two preceding paragraphs, any change concerning authorized persons must be promptly brought to the knowledge of the CENTIF and the respective control authorities mentioned above.

Article 9: Training and information of staff
The financial institutions subject to this Instruction implement, for their staff, a training and awareness program regarding combating money laundering and terrorist financing. It must be adapted to the prevailing legal and regulatory requirements and the needs of stakeholders. The implementation of the program is documented. To this end, the staff training and awareness program must include:

1. basic internal or external training for newly recruited employees, to sensitize them to the financial institution's policy on combating money laundering and terrorist financing as well as legal and regulatory requirements in this area;
2. continuous internal or external training for staff, particularly agents who are in direct contact with customers, to help them detect unusual transactions and recognize attempts at money laundering or terrorist financing. These continuous trainings must also cover the internal procedures to be followed by staff in case of detection of a suspicion of money laundering or terrorist financing;
3. regular information meetings for employees to keep them updated on developments in money laundering and terrorist financing techniques, methods, and trends as well as preventive rules and procedures to be respected in this area;
4. periodic distribution of documentation regarding combating money laundering and terrorist financing.
   In cases where financial institutions subject to this Instruction adopt a training and awareness program developed outside UEMOA, they are required to adapt this program to the prevailing legislative and regulatory requirements in the member states of the Union. The following are subject to the obligation to follow the training and awareness program:
   – staff members whose tasks relate, directly or indirectly, to combating money laundering and terrorist financing; – staff members whose tasks expose them to the risk of being confronted with attempts at money laundering or terrorist financing; – members of governing bodies involved in the control mechanism, particularly the Board of Directors or equivalent deliberating body, the Audit Committee, and the Supervisory Committee.

TITLE II: CONTROLS AND SANCTIONS
Article 10: Internal control
The financial institutions subject to this Instruction ensure control over the proper application of internal programs and procedures regarding combating money laundering and terrorist financing.
The control mechanism referred to in the first paragraph above is audited according to a periodicity that takes into account the nature, volume, and complexity of the institution's operations.
The mechanism must be audited at least once a year.
The conclusions of audit missions are recorded in a report that must be submitted to the Board of Directors or equivalent deliberating body, which takes necessary measures to ensure follow-up.
The conclusions of intra-annual audit missions concerning the control mechanism are recorded in the periodic internal control report to be transmitted to Control Authorities.

Article 11: On-site control of the internal prevention mechanism by control authorities
Within the framework of on-site controls carried out by control authorities, financial institutions subject to this Instruction provide all necessary documents and information for the assessment of the quality of their money laundering and terrorist financing prevention mechanism.

Article 12: Report on the implementation of the internal prevention mechanism for combating money laundering and terrorist financing
Financial institutions subject to this Instruction develop an annual report on the implementation of their entire internal mechanism for combating money laundering and terrorist financing. This report must notably:

1. describe the establishment's organization and resources regarding prevention and combating of money laundering and terrorist financing;
2. relate the training and awareness actions carried out;
3. inventory the controls performed to ensure proper implementation and compliance with customer identification procedures, data retention, detection, and reporting of suspicious transactions;
4. highlight the results of investigations, particularly regarding weaknesses identified in procedures and their compliance, as well as statistics related to the implementation of the suspicious transaction reporting mechanism;
5. report, where applicable, the nature of information transmitted to third-party institutions, including those established outside the country of establishment;
6. draw up a map of the most common suspicious transactions, indicating observed developments;
7. present perspectives and the action program for the coming year.

Article 13: Transmission of report to control authorities
Credit institutions and financial companies transmit the report mentioned in Article 12 above to the BCEAO and UEMOA Banking Commission, within a period of two months from the end of the relevant financial year. SFDs and electronic money institutions transmit the report mentioned in Article 12 above to the BCEAO and their respective control authorities within a period of two months from the end of the relevant financial year.

Article 14: Sanctions
The non-compliance with the rules provided by this Instruction is sanctioned, in accordance with the provisions of the uniform act on combating money laundering and terrorist financing in UEMOA member states and specific regulations currently governing the subject institutions.

TITLE III: FINAL PROVISIONS
Article 15: Repealing provisions
The present Instruction repeals and replaces all prior provisions dealing with the same subject, particularly the provisions of Instruction No. 01/2007/RB dated July 2, 2007 on combating money laundering within financial institutions.

Article 16: Entry into force
The present Instruction, including its annex which forms an integral part thereof, enters into force on the date of its signature.
It is published wherever necessary.
Done in Dakar, September 25, 2017
Tiémoko Meyliet KONE

ANNEX: TEMPLATE QUESTIONNAIRE FOR CROSS-BORDER BANKING CORRESPONDENTS (Article 5, second paragraph, point 6 of this Instruction)
I - Information on the establishment
1.1 - What is the percentage structure of your capital?

• Institution with predominantly public capital………………………………
• Institution with predominantly private capital……………………………….
  1.2 - Please complete the following information:
• Name and address of the establishment ………………………….
• Telephone…………………………………………………..………
• Fax……………………………………………………..….………..
• Email….................................................................................
• Website…………………………………………………………….
• Swift……………………………………………………..…………
  1.3 - Name and contact of the AML/CFT manager and their deputy
  –………………………………………………………………………..
  1.4 - List of management body members
  –………………………………………………………………………..
  –……………………………………………………………………….
  –…...................................